HomeMy Public PortalAboutExhibit MSD 68A - MSD's Response to Rate Commission's First Discovery RequestExhibit MSD 68A
BEFORE THE RATE COMMISSION OF THE
METROPOLITAN ST. LOUIS SEWER DISTRICT
MSD’S RESPONSE TO THE FIRST DISCOVERY REQUEST OF
THE RATE COMMISSION
ISSUE:2023 STORMWATER & WASTEWATER RATE
CHANGE PROCEEDING
WITNESS:METROPOLITAN ST. LOUIS SEWER DISTRICT
SPONSORING PARTY: RATE COMMISSION
DATE PREPARED: APRIL 14, 2023
Exhibit MSD 68A
BEFORE THE RATE COMMISSION
OF THE METROPOLITAN ST. LOUIS SEWER DISTRICT
For Consideration of a Stormwater &
Wastewater Rate Change Proposal
by the Rate Commission of the
Metropolitan St. Louis Sewer District
)
)
)
)
FIRST DISCOVERY REQUEST
OF THE RATE COMMISSION
Pursuant to §§ 7.280 and 7.290 of the Charter Plan of the Metropolitan St. Louis Sewer
District (the “Charter Plan”), Restated Operational Rule § 3(7) and Procedural Schedule §§16 and
17 of the Rate Commission of the Metropolitan St. Louis Sewer District (the “Rate Commission”),
The Metropolitan St Louis Sewer District (the “District”) hereby responds to the April 4, 2023
First Discovery Request of the Rate Commission for additional information and answers regarding
the Rate Change Proposal dated March 24, 2023 (the “Rate Change Proposal”).
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Exhibit MSD 68A
BEFORE THE RATE COMMISSION
OF THE METROPOLITAN ST. LOUIS SEWER DISTRICT
For Consideration of a Stormwater & )
Wastewater Rate Change Proposal )
by the Rate Commission of the )
Metropolitan St. Louis Sewer District )
FIRST DISCOVERY REQUEST
OF THE RATE COMMISSION
Pursuant to §§ 7.280 and 7.290 of the Charter Plan of the Metropolitan St. Louis Sewer
District (the “Charter Plan”), Restated Operational Rule § 3(7) and Procedural Schedule §§ 16 and
17 of the Rate Commission of the Metropolitan St. Louis Sewer District (the “Rate Commission”),
the Rate Commission requests additional information and answers from the Metropolitan St. Louis
Sewer District (the “District”) regarding the Rate Change Proposal dated March 24, 2023 (the
“Rate Change Proposal”).
The District is requested to amend or supplement the responses to this Discovery Request,
if the District obtains information upon the basis of which (a) the District knows that a response
was incorrect when made, or (b) the District knows that the response, though correct when made,
is no longer correct.
The following Discovery Requests are deemed continuing so as to require the District to
serve timely supplemental answers if the District obtains further information pertinent thereto
between the time the answers are served and the time of the Prehearing Conference.
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Exhibit MSD 68A
DISCOVERY REQUEST
1. How does the District allocate “District-Wide” costs (e.g., Board of Trustees, Rate
Commission, Finance, HR, etc.) between Stormwater and Wastewater?
RESPONSE: Overhead cost are initially funded in the District’s Wastewater business
unit. The District adds an overhead rate to direct stormwater costs to allocate districtwide costs
out of the wastewater business unit and into the stormwater business unit
2. Please provide a copy of the most recent revenue bond official statement?
RESPONSE: Please see MSD Exhibit 68B The $109,070,000 Metropolitan St. Louis
Sewer District Wastewater System Improvement and Refunding Revenue Bonds Series 2022B
official statement can also be found at MSDprojectclear org, under About Us, Fiscal & Investor
Relations, Debt Management.
3. Please state whether the District’s financial plan reflects 100% of the Operations
and Maintenance (“O&M”) budget.
RESPONSE: Yes In the Rate Change Proposal (see Exhibit MSD 1), the District has a
financial plan for WW (Table ES-1, pg ES-3) and a separate financial plan for SW (Table ES-3,
pg ES-5) The combination of the two reflect 100% of the O&M projections
4. In Table 4-8 (See Ex. MSD 1; p. 4-17), Capitalized Internal Labor is listed as a
source of funds. Please describe how this is a source of revenue for the District.
RESPONSE: The capitalized internal labor which appears in Table 4-8 reflects internal
labor that is used to complete capital projects. This internal labor is included in the operating
budget and is initially recorded as an operating expense It is transferred out of operating
expenses to the capital program and shown as a funding source The net impact is the capitalized
labor is included in the capital improvements in the Uses of Funds section (line 10 of Table 4-8)
5. Regarding Line 6 of Table 4-7 (See Ex. MSD 1; p. 4-16), please explain what
“Other” Capital Improvement and Replace Program (“CIRP”) costs are included.
RESPONSE: It is common for projects to finish with some of the appropriation left
unspent We refer to these dollars which are returned to fund balance as liquidations Liquidations
occur if projects do not need to utilize their full utility relocation allowance, if the full budget
contingency for change orders is unused, or if final in place quantities of constructed items are
less than bid estimates Liquidation ofprior year projects account for the $(2,513,395) in FY2023
Additional information regarding the liquidation process can be found in the last paragraph on
page 8-8 of the Rate Change Proposal (Exhibit MSD-1) The $10,754,692 in FY2027 is the
estimated cost of the replacement/upgrade of the Billings and Collections System.
6. Regarding Lines 11 & 12 of Table 4-7 (See Ex. MSD 1; p. 4-16) please explain the
reductions in CIRP for Asset Management and Non-Recurring Projects.
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Exhibit MSD 68A
RESPONSE: Line 11 is funded as part of the operating budget (Table 4-6, row 18) Line
12 appears in the WW Financial Plan (page 4-24, Table 4-10, row 15) as a separate type of cash
financed capital Non-Recurring Projects include projects such as studies that are needed to
facilitate the completion of the capital program, but these types ofprojects are recorded as non
operating expenses
7. In Line 7 of Table 4-8 (See Ex. MSD 1; p. 4-17), please state the source(s) of Grants
and Contributions.
RESPONSE: The District was awarded $5 million in funding from the American Rescue
Plan Act to apply towards the construction of the Normandy Sanitary Relief Project
8. Please provide a listing of all extra strength surcharge customers, including billed
volume, strength for Suspended Solids, BOD, and COD, and excess strength surcharge revenue
for each customer for FY 2020, FY 2021, and FY 2022.
RESPONSE: See Exhibit MSD 68C
9. Please provide in Microsoft Excel or csv format, the detailed billing data for
unmetered customers, including the number of attributes for each account.
RESPONSE: See Exhibit MSD 68D
10. What is the basis for projected contributed volume? Was the volume per customer-
analyzed and projected and the projected volume calculated based on such along with projected
customers? If yes, please explain how these calculations were made.
RESPONSE: An analysis was performed to determine the trend of projected volume
changes in past years These percentage changes were applied to budgeted contributed volumes
to project future volumes The calculations can be found in the Wastewater Rate Model (Exhibit
MSD 60, tab labeled Demand).
11. What are the assumptions made by the District for the Low Income Customer-
Assistance Program participation?
RESPONSE: Demand growth rates for Single-family and Multi-family CAP accounts can
be found in Exhibit MSD 60 in the Demand tab on rows 153 through 156. These accounts are
assumed to grow at the same rate as non-CAP accounts
12. How is the City of Arnold charged for wastewater service? How was this revenue
projected over the Rate Change Proposal period?
RESPONSE: A copy of the District’s contract with the City of Arnold and the subsequent
assignment agreement to Missouri American Water has been provided as Exhibit MSD 68E. In
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Exhibit MSD 68A
December 2014, MOAM purchased the City of Arnold’s sanitary sewer system and assumed the
terms of the contract that the District previously signed with Arnold The contract allows the
District to bill MOAMfor its share of operation and maintenance cost based on its metered flows
to the plant It also contains provisions that define the conditions by which the District is allowed
to bill MOAM to recover capital costs In addition, the contract allows the District to charge a
management fee of 10% of the operation and maintenance costs plus capital costs paid to the
District to recover administrative and general overhead costs The projected 15% increase in
revenues associated with the contract was based on the average increase of 15% from FYI4
through FY23, where FYI 4 - FY22 were actuals and FY23 was budget
13. Please provide the FY 2023 beginning fund balance for the Stormwater Regulatory
Fund, Districtwide Stormwater Fund, and Stormwater OMCI Funds.
RESPONSE: The beginning fund balances for the Stormwater Regulatory Fund,
Districtwide Stormwater Fund, and Stormwater OMCI Funds are $6,551,261, $27,813,598, and
$13,457,900, respectively
14. Please explain how parcels were classified as Residential and Non-Residential for
purposes of Stormwater taxes/charges. Please state whether multi-family parcels are consideied
Residential or Non-Residential.
RESPONSE: The District utilized the classifications provided by the City and County
Assessor’s Offices The City and County Assessor’s Offices appear to classify multi-family parcels
as residential property.
15. Please provide a summary of the number of parcels, gross area (lot size) and
impervious area for Residential and Non-Residential properties.
RESPONSE: See Exhibit MSD 68F
16. How was bad debt for the proposed stormwater revenues determined? Has the
District’s experience been 100% payment of ad valorem assessments? What is the District’s
pioposed enforcement mechanism for the Non-Residential impervious area capital charge?
RESPONSE: The District used the bad debt percentage ( 75 %>) for its existing wastewater
customers that will also be billed the stormwater capital rate and utilized a rate of 40%o for
stormwater only customers The 40% rate was based on information received from the Northeast
Ohio Regional Sewer District (Cleveland Area) and the City of Philadelphia Using the
aforementioned percentages, a weighted average bad debt percentage was computed at 4%o
St Louis County and St Louis City collect approximately 98 3%> of their tax assessments when
collections in subsequent years are included The District did not project any increases in the
property taxes relating to the stormwater capital fund (see Exhibit MSD 1, table 5-5, line 3, pg. 5-
7) Increases m assessed values should offset the amount of assessed taxes not collected. The
District intends to use its current collection procedure to collect the Non-Residential imperious
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Exhibit MSD 68A
area capital charge See Appendix 8 51 (See Ex. MSD 1, p 8-47) for the District’s policy
regarding the collection of delinquent accounts
17. Please provide a summary of annual revenue by OMCI district for the last 10 years
and projected over the Rate Change Proposal period.
RESPONSE: See Exhibit MSD 68G
18. Please describe the process for activating the OCMI tax rates? Who determines
when/whether to resume collection of the ad valorem taxes within the OMCI districts?
RESPONSE: Paraphrasing Section 7 310 of the Charter, MSD’s Board of Trustees
determine the amount of taxes to be collected on or before June 30 each year This is usually
accomplished as part of the annual budgeting process
Paraphrasing Section 7.320 of the Charter, prior to making a final determination of the amount
of taxes, MSD’s Board of Trustees shall hold a public hearing and make a finding of fact on the
amount of taxes to be levied This usually is accomplished during and after a public hearing held
after the May Board of Trustees meeting each year
Paraphrasing Section 3 020, paragraph 24 of the Charter, MSD’s Board of Trustees may
disestablish any subdistrict -when its purposes have been fulfilled
To assist MSD’s Board of Trustees, MSD’s staff has in the past collected information from the
public to assist them m this process The last time that MSD’s Board of Trustees considered raising
the tax rate of 12 OMCI subdistricts from 0 0 cents per hundred dollar valuation to the maximum
value allowed by the State of Missouri, MSD staffprovided inputfrom the individual municipalities
located in each of the 12 OMCI’s
19. Please provide a summary of the number and estimated total cost of projects
completed within each OMCI district over the past 10 years and projected over the Rate Change
Proposal period.
RESPONSE: Please see the table below
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Exhibit MSD 68A
Total Cost of Projects
Appropriated over past OMCI #
10 years(FY13-22)
OMCI Name
Projected number of projects
completed (measured by
actual appropriations)
$538,000 5563 Clayton Central OMCI 3
$16,411,925 5564 Coldwater Creek OMCI 48
$1,285,000 5565 Creve Coeur Frontenac OMCI 2
$23,632,598 5566 Deer Creek OMCI 82
$432,000 5569 Fountain Creek OMCI 2
$9,862,000 5571 Gravois Creek OMCI 33
$145,000 5574 Loretta Joplin OMCI 1
$3,342,000 5576 Malme Creek OMCI 14
$446,000 5579 North Affton OMCI 1
$1,891,326 5583 Sugar Creek OMCI 9
$7,180,936 5584 University City OMCI 19
$893,500 5587 Watkins Creek OMCI 4
$1,600,000 5590 Mo River Bonfil OMCI 1
$7,245,000 5591 Meramec River Basin OMCI 5
$2,098,002 5593 Seminary Branch OMCI 9
$1,244,000 5594 Black Creek OMCI 2
Total Cost of Projects Projected
over Rate Change Proposal
Period (FY25-28)
OMCI#OMCI Name
Projected number of
projects to be completed
(measured by planned
appropriations)
(Also includes current FY23 and
nextFY24)
$1,590,000 5563 Clayton Central OMCI 1
$5,687,333 5564 Coldwater Creek OMCI 9
$245,000 5565 Creve Coeur Frontenac OMCI 1
$13,306,339 5566 Deer Creek OMCI 22
$4,606,265 5571 Gravois Creek OMCI 9
$245,000 5574 Loretta Joplin OMCI 1
$2,828,000 5576 Maline Creek OMCI 4
$1,124,997 5583 Sugar Creek OMCI 6
$3,052,305 5584 University City OMCI 9
$209,000 5589 Wellston OMCI 2
$1,251,086 5593 Seminary Branch OMCI 5
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Exhibit MSD 68A
20. What was the District’s estimated cost of completion and compliance with the
Consent Decree as of the District’s 2019 wastewater Rate Change Proposal presentation to the
Rate Commission?
RESPONSE: Cost of the Consent Decree is $6 billion m 2018 dollars, including past
and future expenses
21. What is the District’s estimated cost of completion and compliance with the
Consent Decree today?
RESPONSE: Cost of the Consent Decree is $7 2B in 2023 dollars, including past and
future expenses
22. How was the estimated cost of completion and compliance of the Consent Decree
prepared?
RESPONSE: CIRP development and project cost estimates are based on the most current
data available The estimates include conceptual project cost estimates through engineer design
estimates of probable cost according to the status of the project and degree of design effort
completed to date The projects included are the SSO Master Plan (Exhibit SOD) and the CSO
Long Term Control Plan (LTCP) (Exhibit 50C) and their related delivery projects, plus Capital
CMOM projects, i e., sewer rehabilitation, infrastructure repair, pump station, and force main
rehabilitation.
23. Who prepared the estimated cost of completion and compliance for the Consent
Decree?
RESPONSE: MSD Engineering Department staff maintains the Consent Decree project
cost estimates.
24. For each capital project in the Consent Decree, specify the estimated cost of
completion, the cost components, the time of completion, and the methodology used by the District
to determine the feasibility of completion of each such capital project by 2039.
RESPONSE: MSD anticipates successful completion of these capital projects, as well as
compliance with the Consent Decree See MSD CSO LTCP (MSD Exhibit 50C) and SSO Master
Plans (MSD Exhibit SOD) for planning and scheduling details As challenges and issues arise,
MSD has been successful in addressing them See MSD Exhibit 68H
25. What capital projects (if any) were identified as of 2019 to be completed prior to
April of 2023 during the District’s 2019 wastewater Rate Change Proposal presentation to the Rate
Commission?
RESPONSE: See MSD Exhibit 681
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Exhibit MSD 68A
26 Of the capital projects (if any) identified in Request No. 25, have all such projects
been completed as the date of this discoveiy request? If yes, please identify all projects completed.
If no, please identify the projects which remain to be completed, and the estimated time and costs
for completion for each such project.
RESPONSE: See MSD Exhibit 68J
T1. What is the reasonable likelihood that the District will complete and fully comply
with the Consent Decree by 2039?
RESPONSE: MSD anticipates success in meeting its capital Consent Decree
requirements by 2039
28. What is the reasonable likelihood that the District will complete and fully comply
with the Consent Decree at the currently estimated cost of completion by 2039?
RESPONSE: MSD anticipates success in meeting its capital Consent Decree
requirements by 2039 at the current estimated cost, which represents MSD’s best, reasonable
estimate This is subject to impacts from future economic circumstances, such as inflation, or
other issues such as property rights acquisitions, unanticipated geologic conditions, contractual
performance, supply chain issues, worlrforce availability, regulatory changes, climate change
impacts, etc, or any issues beyond our control.
Respectfully submitted,
..
Susan M.Susan M. Myers I
Brian Stone
THE METROPOLITAN ST. LOUIS SEWER
DISTRICT
2350 Market Street
St. Louis, Missouri 63103
Tel: (314) 768-6366
smyers@stlmsd.com
bstone@stlmsd.com
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Exhibit MSD 68A
CERTIFICATE OF SERVICE
The undersigned certifies that a copy of the foregoing was sent by electronic transmission
to Lisa O. Stump and Brian J. Malone, Lashly & Baer, on this 14th day of April, 2023.
Lisa O. Stump
Lashly & Baer, P.C.
714 Locust Street
St. Louis, Missouri 63101
lostump@lashlybaer.com
Brian J. Malone
Lashly & Baer, P.C.
714 Locust Street
St. Louis, Missouri 63101
bmalone@lashlybaer.com
Susan M. Myers J
Brian Stone
THE METROPOLITAN ST. LOUIS SEWER
DISTRICT
2350 Market Street
St. Louis, Missouri 63103
Tel: (314) 768-6366
smyers@stlmsd.com
bstone@stlmsd.com
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